Hard truths offset by soft skills make up the outsourced drug development and manufacturing industry.
Here’s a simple (and somewhat humorous) example that stems from five experienced biopharma professionals discussing innovation at CDMOs:
The hard truth: “The motivation for all innovation, at the end of the day, is to make product more efficiently and profitability for selling. If you are a CDMO, it’s to your drug sponsor; if you are a drug sponsor, it’s on the commercial market.”
The soft skill: “I’d like to introduce the word ‘pastries’ into our discussion on partner innovation on behalf of drug sponsors. Whenever you need help improving your product at a service provider, bring a box of pastries to your on-site meeting. The scientists and operators will take care of you. And there are no geographical limitations: Anywhere in the world, ‘pastry’ is always a good word for business.”
The synthesis: Innovation should be a function of business- and market-led objectives. At the same time, spurring external partners to focus on improving your processes and products benefits from personal relationships.
Let’s look at three more such truths, skills, and their syntheses for external innovation. I’ve edited them from our panel of biopharma experts (listed below) at Outsourced Pharma San Francisco 2017.
Where Does Innovation Start?
The Hard Truth:
“I’m familiar with many more instances where the flow of innovation starts at the supplier. And for good reason: The supplier was incentivized monetarily to come up with innovations to improve efficiency. This then also opened up more manufacturing space for the supplier’s other customers. In one specific case, a larger supplier was also interested in more work from that sponsor’s pipeline, as well as increased volume for that particular product.”
The Soft Skill:
“But important in these cases of monetizing innovation is an existing close relationship built on trust, particularly so the sponsor is confident any new data and further understanding developed at the CDMO will in fact flow back to them. The sponsor needs to be sure they can also apply that innovation to additional manufacturing sites making that product for them.”
“This is where it gets a bit tricky, because there has to be some kind of strong trust built up for a sponsor to offer specific compensation for further innovations. Usually, the sponsor and supplier need to have worked together. Then, on the one hand, in order to add more assets, resources, and compensation, both sides should feel their businesses will grow together. One the other, they have to allow the businesses to grow separately. Moreover, while the supplier has to realize the compensation is not going to be equal to everything the sponsor will gain from any innovation, the CDMO should in most cases be able to apply those innovations to projects for other customers.”
Are We Of Two Minds? Yes And No
The Hard Truth:
“We continue to self-label our industry as ‘conservative.’ But then again, how can we actually believe that is true? If we’re not explicitly innovative, and can’t prove our innovations, we don’t have a product in the first place. Our focus, though, is often on the intellectual property we need in order to patent our innovation. So IP is our currency for innovation, and that part is conservative.”
The Soft Skill:
“We have this sort of ‘competing dichotomy’: Every time you try to push the envelope, you’re also under pressure not to push the envelope. From a regulatory standpoint in the biopharma industry, when we bring new techniques or new aspects, we have trouble dealing with them. Where does innovation taper off so we can check all the regulatory boxes and follow the rules? That’s the battle that you’re constantly fighting, and the decisions you have to learn to make.”
“It’s like discussions I have with my board: Ultimately, we have to innovate to survive longterm. And interestingly, the decisions on innovations we make will themselves probably be with us a long time. Look at other industries whose companies didn’t innovate. Kodak dominated because they were innovative in chemistry and film, but they couldn’t make the change to digital photography. This happens in all industries: Innovation comes from small companies because they are not invested in the current state of the art. I look at it this way for both sponsors and CDMOs: If something is going to be potentially disruptive, it better come from us, and not from somebody else with less to protect.”
The Japanese As Motivation
The Hard Truth:
“The need to solve specific problems drives most improvements – you can call them small “i” innovations, but they are as critical as larger innovations. I worked on an injectable aseptic-processing project, where the CDMO faced a quality challenge of removing particles found on product inspection. Injectable product needs to be practically particle free, and it’s a painful problem. We had a Japanese pharma customer who saw particles on their stoppers. The Japanese do visual inspection like nobody else! The truth is that it is often the sponsor’s process not working out at its supplier, and that is the innovation driver.”
The Soft Skill:
“We had to go to the supplier and improve both process and unit operation end-to-end, from handling all raw materials, the mixing operation, putting new technology in for inspection, to monitoring the progress of each batch, and receiving constant feedback. It was a thorough coordination and cooperation among sponsor, supplier and consultant.”
“The sponsor was interested in working closely with the supplier as a partner to make the many small “i” innovations necessary. It was project driven, but had to be a win-win. My point is that innovation in outsourcing comes from a mutual motivation: knowing as the sponsor you can address an issue at your CDMO that is impacting your quality, and as the supplier, you will fully benefit from implementing those improved processes.”
Edited comments are from the following participants in the Outsourced Pharma San Francisco 2017 session, “Aligning Motivations For Sponsor And Supplier Innovations”:
Sami Karboni, Co-founder | KO Pharma R&D (moderator)
David Larwood, CEO & President | Valley Fever Solutions
Sriram Naganathan, Senior Director, Chemical Development | Demira
Mihaela Simianu, Director Compliance | Pharmatech Associates
David Upchurch, VP, Supply Chain | Jaguar Animal Health
Jens Vogel, President & CEO, BI Fremont Inc. | Boehringer Ingelheim